Home Owners' Loan Corporation v. Netterville

• Decision Date: 02 December 1937
• Docket Number: No. 3224.,3224.
• Citation: 110 S.W.2d 628
• Parties: HOME OWNERS' LOAN CORPORATION v. NETTERVILLE et ux.
• Court: Texas Court of Appeals

110 S.W.2d 628

HOME OWNERS' LOAN CORPORATION v. NETTERVILLE et ux.

No. 3224.

Court of Civil Appeals of Texas. Beaumont.

December 2, 1937.

Rehearing Denied December 8, 1937.

Appeal from District Court, Jefferson County; R. L. Murray, Judge.

Suit in trespass to try title by V. B. Netterville and wife against the Home Owners' Loan Corporation and another, wherein the named defendant filed a cross-action. From the judgment rendered, the named defendant appeals.

Affirmed.

Lipscomb & Lipscomb, of Beaumont, F. A. Stamper, of Houston, W. T. Kenna, of Beaumont, and James I. Perkins, of Houston, for appellant.

W. S. Nichols, of Beaumont, and Geo. E. Holland, of Henderson, for appellee.

WALKER, Chief Justice.

On the 10th day of October, 1925, J. S. Edwards and others deeded to O. B. Netterville a triangular tract of 1.02 acres of land, fronting 332 feet on Pine Burr boulevard in the city of Beaumont; the N. W. line was 427 feet long, and the third line 276 feet. This land was purchased jointly by O. B. Netterville and his father, V. B. Netterville, which fact was known to the grantors. The consideration was $80 in cash paid by V. B. Netterville, and the balance, $320 in a vendor's lien note payable in monthly installments, was paid jointly by the two purchasers. This property was bought by the Nettervilles for homestead purposes. Immediately after the purchase V. B. Netterville built a house about the middle of the 332-foot line, facing the boulevard, which he and his wife have continuously occupied as their home since that date. On the 19th day of April, 1926, V. B. Netterville entered into a written contract with O. B. Netterville to build him a house on the above-described property, reserving a lien against all the property to secure him in the costs of the improvements; on that same day V. B. Netterville assigned this lien to A. L. Carter Lumber Company. That lien was discharged by O. B. Netterville and released by the Carter Lumber Company on the 28th day of November, 1932. In taking the assignment of this lien the Carter Lumber Company had knowledge of the claim of V. B. Netterville to a half interest in the property, and that he was occupying and using his half as a home.

In the fall of 1929, V. B. Netterville asked the Carter Lumber Company to release from its lien held against O. B. Netterville enough of the property off the north end of the tract for a home for C. K. Netterville, who was planning to get married; at that time the legal title to all the property was in O. B. Netterville. Instead of obeying the request of V. B. Netterville, the Carter Lumber Company had O. B. Netterville, on the 29th day of December, 1929, deed to C. K. Netterville all the north half of the lot, retaining in O. B. Netterville's name only 112 feet off the south end, facing the boulevard. Neither C. K. Netterville nor V. B. Netterville saw this deed at the time it was executed, nor did they know that it conveyed all of the half interest, and at the time it was executed V. B. Netterville did not know that O. B. Netterville had conveyed to C. K. Netterville his home — V. B. thought and assumed that O. B. had conveyed to C. K. only enough off the north end for a home. On the day of the execution of that deed V. B. Netterville entered into a contract with his son, C. K. Netterville, to build him a house on the property deeded to him; and to secure his father in the cost C. K. executed to him a lien against all the property deeded to him by O. B., which, of course, included the home of V. B. Netterville. On that same day V. B. Netterville assigned this lien to the Carter Lumber Company; the house was built as per contract and delivered to C. K. Netterville, who, having married on the 4th day of January, 1930, moved into the house as his home. He defaulted in his payments on his lien; the Carter Lumber Company foreclosed its lien by a trustee sale on the 6th day of June, 1933. On the day of sale, for the first time V. B. Netterville learned that his home was included in the deed from O. B. Netterville to C. K. Netterville, and in the lien taken by him against C. K. Netterville and assigned by him to the Carter Lumber Company. In explaining his want of knowledge of this fact, V. B. Netterville testified that he did many contracting jobs through the Carter Lumber Company; that he never read the instruments prepared for his signature but signed whatever the Carter Lumber Company presented to him; and that in reserving the lien against his son and assigning it to the Carter Lumber Company, he did not know that it included his home but signed the papers placed before him, believing that the Carter Lumber Company had obeyed his instructions and had had O. B. convey to C. K. only the north end of the lot.

The Carter Lumber Company held the title to the property purchased under the trustee sale until February 1, 1934, when it reconveyed the property — all the property against which it had foreclosed its lien — to C. K. Netterville and took in payment a vendor's lien note against all the property thus conveyed to secure it in the unpaid balance of its original debt. On the 16th day of April, 1934, Carter Lumber Company conveyed this note and lien and all its right title and interest in the property to Home Owners' Loan Corporation, who took a new note for the amount of the debt with a new deed of trusts against the property as security; C. K. Netterville, agreed in the transfer that H. O. L. C. was subrogated to all the rights, titles, liens, and equities of the Carter Lumber Company.

From the date of its contract with O. B. Netterville in 1926, to the transfer of its lien to H. O. L. C., Carter Lumber Company knew all the facts as detailed above.

When H. O. L. C. took the assignment of the lien from Carter Lumber Company, its attorneys examined the title to the property, and found on record all the written instruments set out above. Its inspector went upon the property but inspected only the house of C. K. Netterville and its improvements. At the time of this inspection V. B. Netterville and O. B. Netterville were occupying their homes with their families, but neither of their houses was inspected and no inquiry was made of the Nettervilles nor, as far as the record shows, of anyone else as to the claims of O. B. Netterville and V. B. Netterville. No fence was ever built separating the houses from each other, but there was a drainage ditch separating the lot claimed by C. K. from the lot claimed by his father, and a drainage ditch separating the lot claimed by O. B. from the lot claimed by his father. In fact, each of the Nettervilles claimed that his particular lot was bounded and defined by these drainage ditches.

C. K. Netterville defaulted in his payments to H. O. L. C. On the 21st day of September, 1936, V. B. Netterville, joined by his wife, instituted suit in trespass to try title in the district court of Jefferson county against H. O. L. C. and O. B. Netterville to recover the title and possession of the tract of land deeded to C. K. by O. B. on the 27th day of December, 1929. O. B. filed no answer. H. O. L. C. answered by pleas of demurrers, not guilty, etc., and by way of cross-action against V. B. Netterville and his wife, and C. K. Netterville and his wife as cross-defendants, pleading the lien assigned to it by Carter Lumber Company, and praying for judgment against C. K. Netterville for the amount of its debt, and for foreclosure of its lien on all the property against all the cross-defendants. No answer was filed by the cross-defendants to this cross-action.

On trial to the court without a jury judgment was rendered on the 4th day of February, 1937, in favor of V. B. Netterville and his wife against H. O. L. C. for that part of the original lot lying north of the part reserved by O. B. Netterville and facing 50 feet on the boulevard, and in favor of H. O. L. C. against C. K. Netterville for the amount of its lien, and foreclosing the lien against all the cross-defendants on that part of the original lot lying north of the V. B. Netterville 50 feet; the judgment of the court foreclosed the lien against the frontage of 170 feet on the north end of the original lot, that part of the original lot claimed by C. K. H. O. L. C. has duly prosecuted its appeal to this court, praying that the judgment in its favor foreclosing its lien on the 170 feet be affirmed, and that the judgment in favor of V. B. Netterville be reversed and that judgment be rendered by us foreclosing its lien against the V. B. Netterville 50 feet. Appellant's brief invokes the following legal propositions:

Opinion.

On the undisputed evidence, V. B. Netterville and his wife, appellees, owned the equitable title to...